The Observer: Water Tax dead, for now

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Last week we discussed a proposed statewide water tax that was on the verge of being passed in the closing hours of the state legislative year.

The pending bill went through several revisions as the Brown administration and legislative backers sought creative ways to make the first-in-state-history tax on public drinking water somehow palatable to a majority of hesitant lawmakers who were up for re-election this November. None of them wanted to be tagged supporting what has been from its inception a volatile and widely unpopular tax.

A quick look at its chronology finds state Sen. Bill Monning, of Monteray, introduced SB 623 to create a “Safe and Affordable Drinking Water Fund” that would primarily be funded by: 1) a statewide water tax for retail residential and business customers; and 2) taxes on the sale of fertilizers and the operations of dairies. The primary purpose of the bill was to fund solutions in some disadvantaged communities without access to safe drinking water, which are primarily located in rural areas in the Central Valley. The proposal would have generated roughly $110 million per year through a 95-cent monthly fee on home water bills as well as taxes on businesses of up to $10 per month. Another $30 million would come from higher fees on agricultural and dairy businesses, industries whose chemicals contribute to the problem of contaminated groundwater. That incarnation of the proposed tax was moved to the committee parking lot due to fierce opposition from water ratepayers and water districts.

In early 2018, the Brown Administration proposed a budget trailer bill based on SB 623’s framework. On June 8, the Legislature’s Budget Conference Committee rejected the budget trailer bill that proposed the statewide water tax and instead set aside $23.5 million for safe drinking water.

Then in mid-August, Monning with Gov. Brown’s go-ahead, submitted a last-minute twist on the water tax proposals. The bill would have required more than 3,000 community water systems to add a voluntary remittance with an opt-out feature to local water bills in order to generate funding for infrastructure improvements. At the same time, Monning also proposed an updated version of the agricultural taxes from his previous proposal.

The new pair of bills would apply a “voluntary levy” on ratepayers of less than $1 per month would also establish a required tax on dairies and fertilizer manufacturers. The change also allowed customers to opt out of the tax, but it would have a nightmare for water districts to administer. Altogether, the newly-minted bills were expected to generate as much as $100 million per year.

As pointed out here before, there’s money available from other sources — such as the state’s general fund and various water bonds already issued— that could be used for contaminated groundwater remediation, which was exactly what Brown and the Budget Conference Committee did back in June when they deep-sixed the water tax. The answer to this problem is that the people who caused the contamination are the ones who should be at the head of the line to pay for its remediation.

Anyway, on Friday, Aug. 31, in the closing hours before the California legislative year ended, Assembly Speaker Anthony Rendon announced that the proposed water tax bill was dead.

Rendon explained the reasons in a statement that said in part, “The Assembly is committed to identifying a sustainable funding source to ensure safe drinking water for all Californians. That’s why we put Proposition 68 on the (June primary) ballot, which included $540 million for water projects. In the budget this year, we also included over $25 million for emergency drinking water projects, lead testing and remediation, and other water projects.

“But much more needs to be done, and a piecemeal funding approach won’t work …”

Of course, those are all the same arguments that many of us made as to why the tax wasn’t needed in the first place, but almost certainly the Sacramento gang will resurrect it again in 2019. Rendon, demonstrating he has not given up on implementing a public drinking water tax, said he plans on “building on the hard work of Senator Bill Monning and others in this area, Assemblymembers Eduardo Garcia and Heath Flora have agreed to lead our house’s safe water efforts.”

Sounds like a promise to me. Seems like the only time politicians are serious about keeping their promises is when it comes to taxes.

Jim Shields is the Mendocino County Observer’s editor and publisher, and is also the long-time district manager of the Laytonville County Water District. Listen to his radio program “This and That” every Saturday at 12 noon on KPFN 105.1 FM, also streamed live: http://www.kpfn.org.